Former New York Stock Exchange Chairman Richard Grasso (search) received a multimillion dollar compensation package that was "far beyond reasonable levels," and characterized by numerous flaws, according to a confidential report released on Wednesday by the exchange.
The Webb report (search), a 135-page document that summarizes how Grasso's pay and retirement benefits were calculated, had been zealously guarded by the exchange. Last week, a New York state judge demanded that the exchange's lawyers turn the document over to Grasso's legal team.
The report asserts that the former chairman received "approximately $144.5 million to $156.7 million" in excessive compensation and benefits.
It also states that in certain years, Grasso's compensation "was grossly excessive," and the process that determined it was "the product of multiple flaws in the compensation and benefits process employed by the NYSE (search)."
The release of the document capped off a prolonged period of legal wrangling, and ends speculation about its contents. Prepared at the NYSE's behest by former federal prosecutor Dan Webb, the exchange had for months resisted turning over the document on concerns that its content could be embarrassing for the NYSE.
While the NYSE insisted the document was the product of attorney-client privilege, New York State Justice Charles Ramos ruled last week that the document did not constitute legal advice.
At a press conference where the exchange disseminated the document to reporters, Michael York, a lawyer for the exchange, said the Big Board "has respectfully complied with that order and is making the report available."
Some have speculated that the memo contained information that could be damaging to the exchange. But York told reporters that "the report will speak for itself."
The document said that, "against proper governance practice" Grasso was intricately involved in the process that calculated his pay and benefits.
It added that the former chairman "personally selected which board members served on the compensation committee, and some directors he selected were those with whom he had friendships or personal relationships."
The report had been provided to New York Attorney General Eliot Spitzer (search), who sued Grasso over the huge pay and retirement package under a law that applies to not-for-profit corporations in New York.
Spitzer alleged that Grasso had wielded undue influence over the NYSE's compensation committee, which had been headed by former board member Ken Langone (search).
Spitzer's office could not immediately be reached for comment.